LEASES

12 Months Ended

Jan. 01, 2022

The Company has operating leases for retail stores, distribution centers, corporate offices, data centers, and certain equipment. The Company’s leases generally have initial terms ranging from 1 year to 10 years, some of which may include options to extend the leases for up to 5 years, and some of which may include options to early terminate the lease.

As of the periods presented, the Company’s finance leases were not material to the consolidated balance sheets, consolidated statements of operations, or statement of cash flows.

The following components of lease expense are included in SG&A expenses on the Company’s consolidated statements of operations for the fiscal periods indicated:


	For the fiscal year ended
(dollars in thousands)	January 1, 2022		January 2, 2021		December 28, 2019
Operating lease cost	$	166,481	$	180,056	$	179,982




Variable lease cost(*)	64,410		71,971		63,043
Net lease cost	$	230,891	$	252,027	$	243,025

(*)Includes short-term leases, which are not material, and operating lease impairment charges.

Supplemental balance sheet information related to leases was as follows:



	January 1, 2022	January 2, 2021
Weighted average remaining operating lease term (years)	4.9	5.4
Weighted average discount rate for operating leases	3.26%	3.33%

Cash paid for amounts included in the measurement of operating lease liabilities in fiscal 2021 and fiscal 2020 was $209.1 million and $161.7 million, respectively.

Operating lease assets obtained in exchange for operating lease liabilities in fiscal 2021 and fiscal 2020 were $39.6 million and $62.6 million, respectively.

As of January 1, 2022, the maturities of lease liabilities were as follows:


(dollars in thousands)	Operating leases
2022	$	164,338
2023	141,248
2024	113,584
2025	81,206
2026	57,194
After 2026	82,197
Total lease payments	$	639,767
Less: Interest	(50,369)
Present value of lease liabilities(*)	$	589,398

(*)As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date to determine the present value of lease payments.

As of January 1, 2022, the minimum rental commitments for additional operating lease contracts, primarily for retail stores, that have not yet commenced are $6.8 million. These operating leases will commence between fiscal year 2022 and fiscal year 2023 with lease terms of 3 years to 10 years.